International investment

Question 3. Should the system of investor – state arbitration be reformed to include an appellate mechanism? When taken into consideration, the system of investor – state arbitration has suffered, throughout the years, from a lack of consistency between ICSID tribunals, considering that ICSID has been the main tool for conflict resolution regarding investment disputes. Under this perspective and whether or not an appellate mechanism should be implemented, we must first analyze the whole context behind the functioning of the system of investor – state arbitration. The ICSID was created under the World Bank structure in 1996 and was instantly know by its investment disputes arbitral rules and published decisions, despite the previous existence of other ad hoc tribunals and institutions like UNCITRAL. Therefore, it can be affirmed the importance of the role played by the ICSID in this context. When discussing the lack of consistency between ICSID tribunals, Argentina’s financial crisis in early 2000’s must be mentioned and explored because it was of great reputation within the international community As a consequence of a monetary policy of “currency peg” and its unsustainability in the end of 1999, there was political instability, a “run to the banks” because of other states shaken confidence and, finally, in 2002, the abolishment of the currency peg. Argentina had, at that time and due to the established financial crisis, infringed several investors’ rights, as established in previous investment agreements, which led to a series of arbitral disputes. And, as a result of these disputes, their outcomes came in very distinct and incoherent ways that made the international community question the functioning of arbitral decisions regarding BITs.

Still on Argentina’s past situation, it can be affirmed that the main issue with the regarding arbitral decisions was its claim of “necessity” in order to defense and consequently avoid the investment treaties liability, what